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SSW vs. KEX: Which Stock Is the Better Value Option?

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Investors with an interest in Transportation - Shipping stocks have likely encountered both Seaspan (SSW) and Kirby (KEX - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Seaspan has a Zacks Rank of #2 (Buy), while Kirby has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that SSW likely has seen a stronger improvement to its earnings outlook than KEX has recently. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

SSW currently has a forward P/E ratio of 18.17, while KEX has a forward P/E of 28.62. We also note that SSW has a PEG ratio of 1.42. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. KEX currently has a PEG ratio of 2.85.

Another notable valuation metric for SSW is its P/B ratio of 0.95. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, KEX has a P/B of 1.48.

Based on these metrics and many more, SSW holds a Value grade of B, while KEX has a Value grade of C.

SSW has seen stronger estimate revision activity and sports more attractive valuation metrics than KEX, so it seems like value investors will conclude that SSW is the superior option right now.


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